The Nation Newspaper

Category: Pension

  • Pal Pension positions for micro pension

    Pal Pensions, one of the licenced Pension Fund Administrators in Nigeria, is bracing to take a strategic position of the evolving micro pension market, Executive Director, Finance and Operations, Mr Godwin Onoro, has said.

    Onoro, who spoke with reporters in Abuja, said the positioning would allow the firm to take higher market share to expand its already robust clientele base.

    According to him, the micro pension market segment remained untapped and yet to be explored by the pension operators. He however noted that the micro pension segment holds the future of the industry and the economy.

    He said: “While the operators are getting to the peak of the formal sector, the informal sector is yet to be explored. The exploration of the informal sector requires efforts of the entire industry which include the regulator and the operators.

    “Pal Pensions is already doing underground work in preparation for exploration of the informal sector market. The frame work has not been fine-tuned. All we are doing now is to prepare ground. We will have activities when the regulation is released. The regulation will make the picture, the modalities for operation clearer but as it is now, there are still some limitations.”

    Onoro said  Pal Pension ranks first in customer service. “We have put in place structures that make it easy for us to provide good service to our customers whenever they walk into our office. We have six regional offices and we have branches in all states.

  • ‘Govt blueprint needed for infrastructure investment’

    ‘Govt blueprint needed for infrastructure investment’

    FOR pension funds to be invested in infrastructure development, a clear strategy is needed from the Federal Government. This view was made known by the President, Pension Fund Operators Association of Nigeria (PenOp), Longe Eguarekhide, at this year’s World Pension Summit Africa Special, which held in Abuja, the nation’s capital.

    The PenOp chief, who spoke on the sideline at the summit, said until there was a clear strategy provided by the government to enable pension operators and other stakeholders invest in infrastructure development, the issue would continue to be on the front burner without any achievement.

    He said: “The issue of infrastructure development requires definite steps to be taken by government because its position in infrastructure development must be clear to operators and the National Pension Commission (PenCom).

    “It is true that the industry needs to diversify its portfolio investment such as in infrastructure development, but such investment must be clear-headed investment. Presently, there are outstanding projects that have not commenced or are yet to be completed such as the second Niger Bridge. This is as a result of lack of clear strategy, because major projects take as long as seven years to come to financial closure.

    “The pension industry is willing and has demonstrated its willingness to invest in infrastructure development in the country by attending several meetings with the legislatures and labour groups. The rules are clear on investment and government only needs to meet with them.”

    He said the industry could not appropriate government’s assets and invest in them, noting that government needed to articulate a specific direction for the pension operators to follow.

    He disclosed that the operators were looking at commencing small size projects such as power projects that would assist small communities.

    The Executive Secretary, PenOp, Susan Oranye, noted that the issue of infrastructure development need is not peculiar to Nigeria, but the whole of Africa. She said the primary focus is the safety of the funds that belong to contributors of the contributory pension scheme.

    “A lot of infrastructure bonds that pension funds have to do with like housing; roads, and railways can improve the lives of farmers and the agricultural sector. These have positive social effect on the lives of the people. So, we need the government to put together clear strategy that will set the ball rolling for investment,” she added.

  • PenCom bags double awards at WPS

    PenCom bags double awards at WPS

    The National Pension Commission (PenCom) has  emerged winner of double awards at the 2016 Africa Pension Awards (APA) of World Pension Summit ‘Africa Special’.

    The Commission was awarded best performed pension institution on Corporate Governance, and also one of the best performed in coverage and social economic impact in Africa.

    The award was organised as part of activities at the just concluded 2016 World Pension Summit ‘Africa Special’ held in Abuja,

    The Director-General of the Commission, Mrs. Chinelo Anohu-Amazu, said the emergence of PenCom as one of the best in coverage and social economic benefits was based on its ability to enforce compliance on operators in the industry and the introduction of reforms that led to 2014 Pension Reform Act.

    She added that the 2014 Pension Reform Act in Nigeria had made provision for Retirement Savings Account holders to access part of their contribution for mortgage financing.

    She also stated that PenCom had introduced innovative ways in the discharge of its fiduciary responsibilities.

    The 2016 African Pension Award was structured into five categories namely Innovation in Corporate Governance; Deployment of Innovative Practices to Facilitate Wide Coverage and Inclusion; Socio -Economic Impact of Pension or Social Security System; Innovation in Risk Management and innovation on Information, Communication and Technology Platforms for Improved Customer Service Delivery.

    The Africa Pensions Awards were introduced to stimulate innovative practices in the administration of pension and social security amongst African countries by recognising excellence, achievements and commitment to the development of pensions and social security in Africa.

    The awards are also intended to create the much needed setting for African countries to showcase innovations and developments in the African pension and social security space. It is indeed, an opportunity for African countries to benchmark their achievements and also foster positive local and global perception of the African continent.

    Contest for the Africa Pension Awards 2016 was open to both regulators and operators who have deployed innovative ideas to record significant achievements in their delivery of pension and or social benefits.

  • ‘Less than half of CPS potentials explored’

    ‘Less than half of CPS potentials explored’

    Less than half of the pension market is  currently explored with the Contributory Pension Scheme increasing its market share, Managing Director, IEI-Anchor Pension Managers Limited, Glory Etaduovie, has said.

    He said under the CPS, pension, operators derive strong satisfaction supporting the aged with good service, as well as preparing them for graceful retirement, adding that the pension industry is quite interesting and exciting, despite its challenges.

    He said: “Regulation is strong while market is less than half explored. It is also a form of social service. For us at IEI Pension, we derive strong satisfaction for supporting the aged with good service, as well as prepare them for graceful retirement.

    “The industry is not over-populated, which is good for control and sanity. If there is ease of entry and exit, it would create grave danger for the contributory pension. The scheme is relatively new, but it presents its own challenges. But the collaborative style of the industry makes responses better put together and that is why it is getting stronger by the day.

    “It is going to be a critical tool for development shortly. The government is aware of this and seeing it as a partner in progress and thus cautiously positioning for collaborative activities. The government intends to use it to bridge the gap in infrastructure and this will affect other growths and developments.”

    He, however, listed the challenges of the industry as acceptability, transition, harnessing the informal sector and the economy.

    He said some persons on the old scheme were yet to come to terms with the contributory scheme.

    “Such ones, if in good position stand in the way of implementation,” he added.

    He stressed that there are transition challenges for states because of the old scheme and backlogs. In other instances, the bureaucracy of domesticating the PRA in the states.

    “The poor business environment is also affecting private section adoption and implementation. Some who do, do not remit the staff deductions nor theirs as well. This is immoral and they risk penalty from the regulatory body.

    “All of these challenges and others are constantly being reviewed by the industry. The Director General and her team are keeping close eyes on details, as the industry matures”, he said.

  • Blow to BMW workers as car maker plans to close final salary pensions to new contributions 

    German car giant BMW is on a collision course with its United Kingdom (UK) workers over plans to stop 5,000 employees from making fresh contributions to its two gold-plated final salary pension schemes, the Daily Telegraph has learnt.

    In a blow to employees, it has emerged that BMW wants all its UK staff to start paying into a less generous defined contribution (DC) pension plan, which it launched in 2014 and already has about 2,000 members. It plans to close its two defined benefit schemes (DB) to future accrual by so-called active members at the start of June next year and will consult with workers on the changes.

    Both are in deficit. The bigger DB scheme had an estimated deficit of £813m at the end of 2015, while the other had a £34.8m shortfall.

    Unite, the union, immediately declared last night that it would oppose BMW’s proposals.

    The car manufacturer has already shuttered the DB schemes to new members to cut costs. Its smaller scheme was closed thirteen years ago while the larger plan was shuttered in 2013.

    DB schemes promise to pay retirees a set income linked to their wages and number of years of employment. However, such plans have increasingly become unaffordable for many companies and have been scrapped in favour of DC schemes, where pension income is dependent on the amount saved as well as investment performance.

  • Kwara to begin CPS with N145m monthly contribution

    Kwara to begin CPS with N145m monthly contribution

    Kwara State servants employed after 1987 will soon be migrated into the Contributory Pension Scheme (CPS) with about N145 million remitted monthly.

    The Senior Special Assistant on Media and Communication to Kwara State Governor, Dr Muyideen Oluwakorede told journalists that workers employed before 1987 will continue in the Defined Benefit Scheme (DBS).

    The state pays pensioners under the old scheme monthly pension of about N443 million. The government has “tentatively” estimated about N1.6 billion to be paid as contribution into the CPS for all pension arrears.

    According to Oluwakorede, Governor Abdulfatah Ahmed believes that allowing workers from 1987 to migrate to the CPS will ensure they have enough pension contribution remitted into their Retirement Savings Account (RSA).

    Ahmed said the state would have joined the CPS before now but it met a lot of resistance from the Nigeria Labour Congress (NLC).

    He said: “What we plan to do is that anybody who was employed after 1987 will be migrated into the CPS. Anybody who was employed before that time will continue in the normal scheme. This is because if you take them earlier, their contributions will not be enough and that is why we are going back to 1987.

    “Presently, our current monthly pension under the DBS is about N443 million, which will continue on the side and then the monthly commitment that we will have to now do when we go into the CPS will be about N145 million. The state government is currently looking at all the figures that we have to pay altogether and be sure that the state can afford it.

    “We are looking at the cost implications on our finances, not forgetting that the state allocations dropped considerably in the past. Although the state allocation is starting to rise, it has not risen to what it used to be. Migrating the pensioners needs a lot of planning because they have already retired. We have calculated it and the state is trying to correct some paper works but it is certain that we will join the new scheme.”

    He said that pensioners and the workers refused to join the CPS.

    “We couldn’t compel them to join the scheme but we gradually made them understand reasons why the workers should join the new scheme. We made them understand that there are benefits for workers and the state as a whole to enjoy under the scheme like the pension fund, which the Federal Government has pulled resources from for infrastructure. We explained to them that states that are not under the scheme are not eligible to pull resources or borrow from the fund for infrastructure development. We have also started sensitising workers to let them know why we have to take this step now,” Ahmed added.

  • Premium bags most Innovative Pension Company award

    Premium Pension Limited has emerged as Africa’s Most Innovative Pension Company of the Year.

    The pension manager received the award at the African Quality Achievement Awards 2016 edition held in Lagos with the theme; “Quality: a new Culture for a New Africa” organised by the African Quality Institute- publishers of Quality Standard Magazine.

    Speaking at the event, the Managing Director of the company, Wilson Ideva, said quality is inherent in the Contributory Pension Scheme (CPS).

    Ideva stated that the company is well-positioned to weather the economic climate and primed to maximize the gains of the rapidly expanding pension market in the country.

    He said: “The rendition of the pension scheme in Nigeria has been a tortuous journey; a history of ups and downs and even near total collapse before the advent of the  Contributory Pension Scheme in 2004 with the enactment of the Pension Reform Act of that year. The CPS is a clear departure from the former Defined Benefit Scheme that proved unworkable and brought untold hardship to retirees in the country.

    “The airtight statutory provisions and the efficiency of the regulatory body, the National Pension Commission (PenCom), have combined to guarantee quality as a watchword in the industry.”

    Ideva stressed that Premium Pension has stood out with top-notch professionalism, qualitative customer-care orientation and cutting-edge technology, among other attributes.

    “We are well-positioned to weather whatever economic climate and primed to maximize the gains of the rapidly expanding pension market in the country,” he added.

    The convener of the event, Desmond Esorougwe said the quest for quality is one for all organisations, and all organizations use and need quality for sustenance, growth and consistency.

    He noted that that their priority is to promote quality awareness and quality management discipline in Africa thereby creating sustainable environment for business growth and profitability.

    “Our other objectives are to sensitize all stakeholders to embrace best practice in quality management, share and exchange ideas on the importance of quality orientation to organisations, nations and even individuals and also provide a platform to reinforce the growing relationship between quality and productivity and setting and improving service standard in organisations,” he said.

  • How to slice your pension to cover bills and grow your pot

    Retirement does not have to be a stark choice between buying an annuity or retaining your investments and taking an income from them.

    More people than ever are blending the two options to provide a basic level of guaranteed income while actively managing the rest of their portfolios.

    The key to deciding how to use your retirement savings to best effect is sitting down and ranking how much you value things such as flexibility of income, steady monthly payments, or knowing that you can pass on your savings to the next generation in the best possible way.

    There are two basic ways to access the money in your pension pot: buying an annuity – a guaranteed income for life – or buying a programme withdrawal- entering a contract that keeps funds invested while allowing regular or ad hoc payments.

    A good way to begin designing your retirement portfolio is thinking in terms of two buckets, one for certainty of income and one for discretionary spending.

  • Pensioners urge Fed Govt to pay outstanding benefits

    Pensioners urge Fed Govt to pay outstanding benefits

    Pensioners under the umbrella of the Association of Retired Senior Public Officers of Nigeria (ARFESPON) have appealed to the Federal Government to pay them all outstanding pension benefits.

    They are also asking the government to stop the disparity in payment of pension benefits between its members and their serving counterparts.

    ARFESPON is made up of retired management level officers from salary grade level 14 to Permanent Secretaries, Comptrollers-General of Customs, Immigration and Prisons and career Ambassadors.

    The President of the Lagos State chapter of the association, Olufemi Odewabi, while speaking with reporters in Lagos said government currently owes its members 30-month pension benefits.

    According to him, the government is yet to implement the 53.4 per cent pension increase following salary increase it effected for federal public workers in 2010, which by stipulations of the law of the federation should supply to retirement benefits of pensioners.

    He said: “The Federal Government is yet to listen to yearnings of retired senior public officers. We have been pleading with government to totally effect the 2010 increase in our pension benefits and to end the era of disparity in the payment of retirement benefits to pensioners.

    “The government had during the regime of Goodluck Jonathan effected 53.4 per cent increase in the salaries of public office workers and failed to do same for pensioners. Section 173, sub-section 3 of the Constitution of Nigeria states that pension shall be reviewed every five years or together with any federal civil service salary review, whichever is earlier.”

    “When we reacted to government’s non-compliance with the above section of the law regarding the increase it made in the salaries of its workers in 2010, the government set up a committee to review our case. But the committee went contrary to the position of the Constitution on the issue and recommended 33 per cent increase for the pensioners against 53.4 per cent effected on federal workers’ salaries.”

    This, according to Odewabi, left the pensioners with a short change of 20.4 percent. He lamented that rather than pay the 33 per cent increase recommended by the committee in full, government has been paying in installments. He appealed to President Muhammadu Buhari to clear the 30 months arrears and pay up the sum total of the 20.4 per cent deducted by the committee.

    He noted that his members were right in their demand for payment of the 20.4 percent deductions because all the reasons given by the committee for the deductions were wrong, adding that the tax percentage deducted by the committee was against Section 173, sub-section 4 of the Constitution of Nigeria, which states that pensioners in respect of service in the public service of the federation shall not be taxed.

    He said the per cent deducted for contributory pension scheme was wrong because all his members are under the Defined Benefit  old scheme and have nothing to do with Contributory Scheme.

    “The Federal Housing Scheme, for which the committee deducted 2.5 per cent should not be because his members are no longer under the housing scheme. The deductions are illegal and I urge President Buhari to listen to our cries and pay both the outstanding 30 months and the 20.4 per cent deductions. We also want the President to intervene in the harmonisation of disparity existing in payments between serving and retired public officers.”

  • Trustfund to employers: remit pension deductions seven days after salary payment

    Trustfund Pension Plc has advised employers under the Contributory Pension Scheme (CPS) to remit pension deductions not later than seven days after salaries are paid as stipulated by the Pension Reform Act, 2014.

    The Company’s Regional Manager, Obafemi Arobadi, made this call while speaking with reporters in Lagos. He stated that as pension manager, Trustfund has observed that there were cases where some employers did not remit as and when due.

    He said: “The law states that seven days after salaries have been paid, employees’ pension deductions should be remitted. But just like we have observed, there were cases where some employers did not remit. When we discovered such, we wrote them, visited, persuaded them and convinced them to know the importance and why they should remit.

    “But it is not our duty to pursue employers to enforce the law on them. What the law allows is that the regulator, the National Pension Commission (PenCom), will employ recovery agents, who could be accounting firms or solicitors. Our own role as pension fund administrators is to ensure that we keep the regulator up to date on which employer are not remitting as at when due.”

    He explained that the Act increased the rate of contribution for employees and employers to a minimum of eight per cent and 10 per cent respectively, adding that employers, who chose to bear the full pension cost of their employees, are required to contribute a minimum of 20 per to the scheme.

    “The rates remain applicable to monthly emoluments. The Act defines monthly emoluments as ‘total emoluments as may be defined in the employee’s contract of employment, but shall not be less than a total sum of basic salary, housing allowance and transportation allowance,” he said.